1933 Act File No. 33-47641
1940 Act File No. 811-6650
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 7 [X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
AMENDMENT No. 7 [X]
LORD ABBETT RESEARCH FUND, INC.
Exact Name of Registrant as Specified in Charter
767 Fifth Avenue, New York, N.Y. 10153
Address of Principal Executive Office
Registrant's Telephone Number (212) 848-1800
Kenneth B. Cutler, Vice President & Secretary
767 Fifth Avenue, New York, N.Y. 10153
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box)
immediately on filing pursuant to paragraph (b) of Rule 485
on (date) pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a) (1) of Rule 485
on (date) pursuant to paragraph (a) (1) of Rule 485
X 75 days after filing pursuant to paragraph (a) (2) of Rule 485
- ----
on (date) pursuant to paragraph (a) (2) of Rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
In accordance with Rule 24f-2 under the Investment Company Act of 1940, an
indefinite amount of Registrant's shares of Small-Cap Series are being
registered by this registration statement under the Securities Act of 1933.
Amount of Registration Fee: $500 for Securities Act of 1933 Registration.
Registrant's Large-Cap Series (formerly Series 1) and Mid-Cap Series (formerly
Lord Abbett Mid-Cap Research Fund) have registered an indefinite amount of
securities under the Securities Act of 1933 pursuant to Rule 24f-2(a) (1) and a
Rule 24f-2 Notice for these two series for the most recent fiscal year will be
filed with the Commission on or about January 23, 1996.
<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 7 (the "Amendment") to the Registrant's
Registration Statement relates to Small-Cap Series and Mid-Cap Series(formerly
Lord Abbett Mid-Cap Research Fund) of the Registrant.
The other series of shares of the Registrant is listed below and is offered
by the Prospectus in Part A of the Post-Effective Amendment to the Registrant's
Registration Statement as identified. The following is a separate series of
shares of the Registrant. This Amendment does not relate to, amend or otherwise
affect the Prospectuses contained in the prior Post-Effective Amendments, and
pursuant to Rule 485(d) under the Securities Act of 1933, does not affect the
effectiveness of such Post-Effective Amendments.
Large-Cap Series Post-Effective
(formerly Series 1) Amendments No. 4 and 6
----------------------
LORD ABBETT RESEARCH FUND, INC.
FORM N-1A
Cross Reference Sheet
Post-Effective Amendment No. 7
Pursuant to Rule 481(b)
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
- ---------- -----------------------------------
1 Cover Page
2 Fee Table
3 (a) Financial Highlights; Performance
3 (b) N/A
4 (a) (i) Cover Page
4 (a) (ii) Investment Objective; How We Invest
4 (b) (c) How We Invest
5 (a) (b) (c) Our Management; Back Cover Page
5 (d) N/A
5 (e) Back Cover Page
5 (f) Our Management
5 (g) N/A
5 A Performance
6 (a) Cover Page
6 (b) (c) (d) N/A
6 (e) Cover Page
6 (f) (g) Dividends, Capital Gains
Distributions and Taxes
7 (a) Back Cover Page
7 (b) (c) (d)
(e) (f) Purchases
8 (a) (b) (c)
(d) Redemptions
9 N/A
10 Cover Page
<PAGE>
Form N-1A Location In Prospectus or
Item No. Statement of Additional Information
- ---------- -------------------------------------
11 Cover Page - Table of Contents
12 N/A
13 (a) (b) (c)
(d) Investment Objective and Policies
14 Trustees and Officers
15 (a) (b) N/A
15 (c) Trustees and Officers
16 (a) (i) Investment Advisory and Other Services
16 (a) (ii) Trustees and Officers
16 (a) (iii) Investment Advisory and Other Services
16 (b) Investment Advisory and Other Services
16 (c) (d) (e)
(g) N/A
16 (f) Purchases, Redemptions
and Shareholder Services
16 (h) Investment Advisory and Other Services
16 (i) N/A
17 (a) Portfolio Transactions
17 (b) N/A
17 (c) Portfolio Transactions
17 (d) Portfolio Transactions
17 (e) N/A
18 (a) Cover Page
18 (b) N/A
19 (a) (b) Purchases, Redemptions
and Shareholder Services; Notes
to Financial Statements
19 (c) N/A
20 Taxes
21 (a) Purchases, Redemptions
and Shareholder Services
21 (b) (c) N/A
22 (a) N/A
22 (b) Past Performance
23 Financial Statements; Supplementary
Financial Information
<PAGE>
LORD ABBETT RESEARCH FUND, INC.
THE GENERAL MOTORS BUILDING
767 FIFTH AVENUE
NEW YORK, NY 10153-0203
800-426-1130
THE SMALL CAP-SERIES AND THE MID-CAP SERIES (SINGULARLY SMALL-CAP SERIES
AND MID-CAP SERIES, RESPECTIVELY; COLLECTIVELY THESERIES) ARE A DIVERSIFIED
SEPARATE SERIES OF LORD ABBETT RESEARCH FUND, INC. (WE OR THE FUND), AN OPEN-END
MANAGEMENT INVESTMENT COMPANY INCORPORATED IN MARYLAND ON APRIL 6, 1992. THE
FUND CURRENTLY CONSISTS OF THREE SERIES. ONLY SHARES OF THE SMALL-CAP AND
MID-CAP SERIES ARE BEING OFFERED IN THIS PROSPECTUS.
THE SMALL-CAP SERIES' INVESTMENT OBJECTIVE IS TO SEEK LONG-TERM CAPITAL
APPRECIATION. THE SMALL-CAP SERIES WILL SEEK ITS OBJECTIVE THROUGH INVESTMENTS
PRIMARILY IN EQUITY SECURITIES WHICH ARE BELIEVED TO BE UNDERVALUED IN THE
MARKETPLACE. IN ITS SEARCH FOR VALUE, THE SMALL-CAP SERIES SEEKS COMPANIES WHICH
ARE PRIMARILY SMALL-SIZED, BASED ON THE VALUE OF THEIR OUTSTANDING STOCK. THESE
COMPANIES ARE OFTEN OUT OF FAVOR OR NOT CLOSELY FOLLOWED BY INVESTORS AND, AS A
RESULT, MAY OFFER SUBSTANTIAL APPRECIATION POTENTIAL OVER TIME.
THE MID-CAP SERIES' INVESTMENT OBJECTIVE IS TO SEEK CAPITAL APPRECIATION
THROUGH INVESTMENTS PRIMARILY IN EQUITY SECURITIES WHICH ARE BELIEVED TO BE
UNDERVALUED IN THE MARKETPLACE. IN ITS SEARCH FOR VALUE, THE MID-CAP SERIES
SEEKS COMPANIES WHICH ARE PRIMARILY MIDDLE-SIZED, BASED ON THE VALUE OF THEIR
OUTSTANDING STOCK. THERE CAN BE NO ASSURANCE THAT EITHER SERIES WILL ACHIEVE ITS
OBJECTIVE.
THE DIRECTORS MAY PROVIDE FOR ADDITIONAL SERIES FROM TIME TO TIME. WITHIN
EACH SERIES, THE FREELY TRANSFERABLE SHARES WILL HAVE EQUAL RIGHTS WITH RESPECT
TO DIVIDENDS, ASSETS, LIQUIDATION AND VOTING.
THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE SERIES THAT
A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION
ABOUT THE FUND AND THE SERIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND IS AVAILABLE UPON REQUEST WITHOUT CHARGE. THE STATEMENT OF
ADDITIONAL INFORMATION IS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS AND MAY
BE OBTAINED, WITHOUT CHARGE, BY WRITING TO THE FUND OR BY CALLING THE FUND AT
800-874-3733. ASK FOR PART B OF THE PROSPECTUS THE STATEMENT OF ADDITIONAL
INFORMATION. THE DATE OF THIS PROSPECTUS, AND THE DATE OF THE STATEMENT OF
ADDITIONAL INFORMATION, IS FEBRUARY __, 1996.
PROSPECTUS
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS. SHAREHOLDER INQUIRIES SHOULD
BE MADE IN WRITING TO THE FUND OR BY CALLING 800-821-5129. YOU CAN ALSO MAKE
INQUIRIES THROUGH YOUR BROKER-DEALER.
CONTENTS PAGE
1 Investment Objectives 2
2 Fee Table 2
3 How We Invest 2
4 Purchases 7
5 Our Management 8
6 Dividends, Capital Gains
Distributions and Taxes 9
7 Redemptions 9
8 Performance 10
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
EACH SERIES IS SOLD ONLY IN NEW YORK.
<PAGE>
1 INVESTMENT OBJECTIVES
---------------------
The Investment objective of the Small-Cap Series is to seek long-term capital
appreciation. The investment objective of the Mid-Cap Series is to seek capital
appreciation through investments, primarily in equity securities, which are
believed to be undervalued in the marketplace.
2 FEE TABLE
---------
A summary of expenses of each Series is set forth in the table below in order to
provide a better understanding of such expenses. The example is not a
representation of past or future expenses. Actual expenses may be more or less
than those shown.
<TABLE>
<CAPTION>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES SMALL-CAP MID-CAP
(AS A PERCENTAGE OF OFFERING PRICE) SERIES SERIES
Maximum Sales Load(1) on Purchases --------- -------
(See Purchases) None None
Redemption Fee None None
- ---------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (See Our Management) .00%(2) .00%(2)
12b-1 Fees None None
Other Expenses (See Our Management) .00%(2) .00%(2)
- ---------------------------------------------------------------------
Total Operating Expenses .00%(2) .00%(2)
<FN>
Example: Assume annual return of each Series is 5% and there is no change in the
level of expenses described below. For every $1,000 invested, with reinvestment
of all distributions, you would pay the following total expenses if you closed
your account after the number of years indicated.
1 year(3) 3 years(3)
--------- ----------
Small-Cap Series $0 $0
Mid-Cap Series $0 $0
(1)Sales load is referred to as sales charge throughout this Prospectus.
(2)Although not obligated to, Lord, Abbett & Co. intends to waive its management
fee and subsidized the expenses of each Series. The management fee for each
Series would be .75% and other expenses are estimated to be .40% (for total
estimated operating expenses of 1.15%) for each Series for the full year after
its commencement of operations, absent such waiver and subsidy.
(3)These figures reflect a management fee waiver and expense subsidy from Lord,
Abbett & Co. These expenses without such waiver and subsidy are estimated to be
$12 and $38, respectively, for each Series.
</FN>
</TABLE>
3 HOW WE INVEST
-------------
SMALL-CAP SERIES. The Small-Cap Series will attempt to achieve its objective by
investing principally in a carefully selected portfolio of common stocks.
Dividend and investment income is of incidental importance, and the Small-Cap
Series may invest in securities which do not produce any income. Although the
Small-Cap Series typically will hold a large, diversified number of securities
identified through a quantitative, value-driven investment strategy, it does
entail above-average investment risk in comparison to the overall U.S. stock
market. Shares of the Small-Cap Series should be purchased with a long-term view
in mind.
The stocks which the Small-Cap Series generally invests in are those which, in
the Fund managements judgment, are selling below intrinsic value and at prices
that, do not reflect adequately their long-term business potential. Selected
smaller stocks may be undervalued because they are often overlooked by many
investors, or because the public is overly pessimistic about the companys
prospects. Accordingly, their prices can rise either as a result of improved
business fundamentals, particularly when earnings grow faster than general
expectations, or as more investors come to recognize the full extent of a
companys underlying potential. The price of shares in relation to book value,
sales, asset value, earnings, dividends and cash flow; both historical and
prospective, are key determinants in the security selection process. These
criteria are not rigid, and other stocks may be included in the Small-Cap Series
portfolio if they are expected to help it attain its objective. These criteria
can be changed by the Funds Board of Directors.
The Small-Cap Series also may invest in preferred stocks and bonds, which have
either attached warrants or a conversion privilege into common stocks. In
addition, the Small-Cap Series may purchase options on stocks that it holds as
protection against a significant price decline, may purchase and sell stock
index options and futures to hedge overall market risk and the investment of
cash flows and write listed put and listed covered call options. See "Small-Cap
Series Hedging
<PAGE>
and Income Enhancement Strategies" below.
In seeking to achieve its investment objective, the Small-Cap Series generally
will invest in common stocks with smaller market capitalizations than those of
the stocks included in the Dow Jones Industrial Average or the largest stocks
included in the Standard & Poors 500 Composite Index. As a result, under normal
circumstances, at least 65% of the Small-Cap Series total assets will be made up
of common stocks issued by smaller, less well known companies (with market
capitalizations typically less than $1 billion) selected on the basis of
fundamental investment analysis. The Small-Cap Series may, however, invest up to
35% of its total assets in the securities of any issuer without regard to its
size or the market capitalization of its common stock. Companies in which the
Small-Cap Series is likely to invest may have limited product lines, markets or
financial resources and may lack management depth or experience. The securities
of these companies may have limited marketability and may be subject to more
abrupt or erratic market movements than securities of larger, more established
companies or the market averages in general.
SMALL-CAP SERIES HEDGING AND INCOME ENHANCEMENT STRATEGIES. The Small-Cap Series
also may engage in various portfolio strategies, to reduce certain risks of its
investments and to attempt to enhance income, but not for speculation. These
strategies include the purchase and sale of put and call options, and the
purchase and sale of stock index futures and combinations thereof. Fund
management will use such techniques as market conditions warrant. The Small-Cap
Series ability to use these strategies may be limited by market conditions,
regulatory limits and tax considerations and there can be no assurance that any
of these strategies will succeed. See Investment Objective and Policies in the
Statement of Additional Information. New financial products and risk management
techniques continue to be developed and the Small-Cap Series may use these new
investments and techniques to the extent consistent with its investment
objective and policies.
OPTIONS TRANSACTIONS. The Small-Cap Series may purchase and write (i.e., sell)
put and call options on equity securities or stock indices that are traded on
national securities exchanges. A call option on equity securities gives the
purchaser, in exchange for a premium paid, the right for a specified period of
time to purchase the securities subject to the option at a specified price (the
exercise price or strike price). The writer of a call option, in return for the
premium, has the obligation, upon exercise of the option, to deliver, depending
upon the terms of the option contract, the underlying securities to the
purchaser upon receipt of the exercise price. When the Small-Cap Series writes a
call option, it gives up the potential for gain on the underlying securities in
excess of the exercise price of the option during the period that the option is
open.
A put option on equity securities gives the purchaser, in return for a premium,
the right, for a specified period of time, to sell the securities subject to the
option to the writer of the put at the specified exercise price. The writer of
the put option, in return for the premium, has the obligation, upon exercise of
the option, to acquire the securities underlying the option at the exercise
price. The Small-Cap Series as the writer of a put option might, therefore, be
obligated to purchase underlying securities for more that their current market
value.
Options on stock indices are similar to options on equity securities except
that, rather than the right to take or make delivery of stock at a specified
prices, an option on a stock index gives the holder the right, in return for a
premium paid, to receive, upon exercise of the option, an amount of cash if the
closing level of the stock index upon which the option is based is greater than,
in the case of a call, or less than, in the case of a put, the exercise price of
the option. The writer of an index option, in return for a premium, is obligated
to pay the amount of cash due upon exercise of the option.
The Small-Cap Series will write only covered options. An option is covered if,
so long as the Small-Cap Series is obligated under the option, it owns an
offsetting position in the underlying securities or maintains cash, U.S.
Government securities or other liquid high-grade debt obligations
<PAGE>
with a value sufficient at all times to cover its obligations in a segregated
account. See Investment Objective and PoliciesLimitation on Small-Cap Series
Purchase and Sale of Stock Options, Options on Stock Indices and Stock Index
Futures in the Statement of Additional Information.
There is no limitation on the amount of call options the Small-Cap Series may
write. The Small-Cap Series may only write covered put options to the extent
that cover for such options does not exceed 25% of the Small-Cap Series net
assets. The Small-Cap Series will not purchase an option if, as a result of such
purchase, more than 20% of its total assets would be invested in premiums for
such options.
STOCK INDEX FUTURES. The Small-Cap Series may purchase and sell stock index
futures which are traded on a commodities exchange or board of trade for certain
hedging and risk management purposes in accordance with regulations of the
Commodities Futures Trading Commission.
A stock index futures contract is an agreement in which one party agrees to
deliver to another an amount of cash equal to a specific dollar amount times the
difference between a specific stock index at the close of the last trading day
of the contract and the price at which the agreement is made. No physical
delivery of the underlying stocks in the index is made.
The Small-Cap Series may not purchase or sell stock index futures if,
immediately thereafter, more than one-third of its net assets would be hedged.
In addition, except in the case of a call written and held on the same index,
the Small-Cap Series will write call options on indices or sell stock index
futures only if the amount resulting from the multiplication of the then current
level of the index (or indices) upon which the options or futures contract(s) is
based, the applicable multiplier(s), and the number of futures or options
contracts which would be outstanding would not exceed one-third of the value of
the Small-Cap Series net assets.
The Small-Cap Series ability to enter into stock index futures and listed
options is limited by the requirements of the Internal Revenue Code of 1986, as
amended (the Internal Revenue Code), for qualification, as a regulated
investment company. See Small-Cap Series under Taxes in the Statement of
Additional Information.
MID-CAP SERIES. The Mid-Cap Series invest primarily in common stocks (including
securities convertible onto common stocks) of mid-cap companies, defined for
this purpose as companies whose outstanding equity securities have an aggregate
market value of between $200 million and $5 billion.Under normal circumstances,
at least 65% of the Series total assets will consist of investments made in
mid-cap companies, determined at the time of purchase. Stocks are selected based
on capital appreciation potential, without regard to current income, utilizing a
value-based, disciplined investment process that seeks to identify and invest in
undervalued securities. This investment process consists of three steps.
First, quantitative research is used to identify a universe of stocks which are
relatively undervalued in comparison to other similar investments. From this
universe of stocks the most attractive companies are set aside as candidates for
further analysis.
In the second step of the process, fundamental research seeks to identify
candidates likely to produce attractive investment returns over a six to twelve
month time period. This is done, for example, by analyzing the key drivers of
each companys profitability, such as the companys competitive position, its
strategies for improving returns to shareholders, and the probability of
managements success based on past experience.
The third part of the investment process is an analysis of the companys
prospects in view of our economic outlook for a standard time period. This
outlook is developed periodically throughout the year, taking into
consideration, for example, such factors as (i) the level and direction of
inflation, interest rates, and general economic activity and (ii) government
monetary and fiscal policies.
The investment portfolio of the Mid-Cap Series will be diversified among many
issuers representing many different industries. The portfolio of the Mid-Cap
Series reflects the collective judgment of the Research Department of Lord,
Abbett & Co. ("Lord Abbett") as to what securities represent the greatest
long-term investment value pursuant to the Mid-Cap Series
<PAGE>
investment objective and policies. At the time of purchase, securities selected
for the Mid-Cap Series portfolio may be largely neglected by the investment
community or, if widely followed, they may be out of favor.
Mid-Cap Series may deal in options on securities, and securities indexes, and
financial futures transactions, including options on financial futures. Mid-Cap
Series may write (sell) covered call options and secured put and call options
provided that no more than 5% of its net assets (at the time of purchase) may be
invested in premiums on such options.
Mid-Cap Series is not currently employing any of the options and financial
futures transactions described above.
POLICIES COMMON TO BOTH SERIES.
Foreign Investments. Up to 35% of each Series net assets (at the time of
investment) may be invested in foreign securities (of the type described above)
which are primarily traded in foreign countries. See Risk Factors below.
Foreign Currency Hedging Techniques. Each Series may utilize various foreign
currency hedging techniques described below.
A forward foreign currency contract involves an obligation to purchase or sell a
specific amount of a currency at a set price on a future date. Each Series may
enter into forward foreign currency contracts in primarily two circumstances.
First, when each Series desires to lock in the U.S. dollar price of the
security, by entering into a forward contract for the purchase or sale of the
amount of foreign currency involved in the underlying security transaction, the
Series will be able to protect against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date of purchase or sale and the date of
settlement.
Second, when Fund management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, each Series may enter into
a forward contract to sell the amount of foreign currency approximating the
value of some or all of a Series portfolio securities denominated in such
foreign currency or, in the alternative, a Series may use a
cross-currency-hedging technique whereby it enters into such a forward contract
to sell another currency (obtained in exchange for the currency which the
portfolio securities are denominated in if such securities are sold) which it
expects to decline in a similar manner but which has a lower transaction cost.
Precise matching of the forward contract and the value of the securities
involved will generally not be possible.
Each Series also may purchase foreign currency put options and write foreign
currency call options on U.S. exchanges or U.S. over-the-counter markets (O-T-C
options are generally less liquid and involve issuer credit risk). A put option
gives a Series, upon payment of a premium, the right to sell a currency at the
exercise price until the expiration of the option and serves to insure against
adverse currency price movements in the underlying portfolio assets denominated
in that currency. The premiums paid for such foreign currency put options will
not exceed 5% of the net assets of a Series.
Unlisted options together with other illiquid securities may comprise no more
than 15% of each Series net assets.
A foreign currency call option written by a Series gives the purchaser, upon
payment of a premium, the right to purchase from the Series a currency at the
exercise price until the expiration of the option. A Series may write a call
option on a foreign currency only in conjunction with a purchase of a put option
on that currency. Such a strategy is designed to reduce the cost of downside
currency protection by limiting currency appreciation potential. The face value
of such writing or cross-hedging (described above) may not exceed 90% of the
value of the securities denominated in such currency (a) invested in by the
Series to cover such call writing or (b) to be crossed.
OTHER POLICIES. Each Series may invest up to 15% of its net assets in illiquid
securities. Securities determined by the Directors to be liquid pursuant to
Securities and Exchange Commission Rule 144A will not be subject to this limit.
Investments by a Series in Rule 144A securities initially determined to be
liquid could have the effect of diminishing the level of the Series liquidity
during periods of decreased market interest in such securities. Under the Rule,
a qualifying unregistered security may be resold to a qualified institutional
buyer without registration and without regard to whether the seller originally
purchased the security for investment.
<PAGE>
Each Series may engage in (a) investing in closed-end investment companies, (b)
investing in straight bonds or other debt securities, including lower rated,
high-yield bonds, (c) lending of its portfolio securities to broker-dealers on a
secured basis and (d) investing in rights and warrants to purchase securities
(included within these purchases but not exceeding 2% of the value of its
assets, may be warrants which are not listed on the New York or American Stock
Exchanges), but neither Series has the present intention to commit more than 5%
of gross assets to any one of these four identified practices. Neither Series
will invest more than 5% of its assets (at the time of investment) in lower
rated (BB/Ba or lower), high-yield bonds.
Each Series will not borrow money, except as a temporary measure for
extraordinary or emergency purposes and then not in excess of 5% of its gross
assets at the lower of cost or market value.
For temporary defensive purposes or to create reserve purchasing power pending
other investments, each Series may invest in high-quality, short-term debt
obligations of banks, corporations or the U.S. Government of the type normally
owned by a money market fund.
Each Series may on occasion enter into repurchase agreements whereby the seller
of a security agrees to repurchase that security from a Series at a mutually
agreed-upon time and price. The period of maturity is usually quite short,
possibly overnight or a few days, although it may extend over a number of
months. The resale price is in excess of the purchase price, reflecting an
agreed-upon rate of return effective for the period of time a Series money is
invested in the security. Each Series repurchase agreements will at all times be
fully collateralized in an amount at least equal to the purchase price,
including accrued interest earned on the underlying securities. The instruments
held as collateral are valued daily, and if the value of the instruments
declines, a Series will require additional collateral. If the seller defaults
and the value of the collateral securing the repurchase agreement declines, a
Series may incur a loss.
Each Series may purchase or sell securities on a when-issued or delayed delivery
basis. When-issued or delayed delivery transactions arise when securities are
purchased or sold by a Series with payment and delivery taking place as much as
a month or more in the future in order to secure what is considered to be an
advantageous price and yield to the Series at the time of entering other liquid
high-grade debt obligations having a value equal to or greater than the Series
purchase commitments; the Custodian will likewise segregate securities sold on a
delayed delivery basis. The securities so purchased are subject to market
fluctuation and no interest accrues to the purchaser during the period between
purchase and settlement. At the time of delivery of the securities the value may
be more or less than the purchase price and an increase in the percentage of the
Series assets committed to the purchase of securities on a when-issued or
delayed delivery basis may increase the volatility of that Series net asset
value.
Each Series may make short sales of securities or maintain a short position,
provided that at all times when a short position is open a Series owns an equal
amount of such securities or securities convertible into or exchangeable,
without payment of any further consideration, for an equal amount of the
securities of the same issuer as the securities sold short (a short sale
against-the-box), and that not more than 25% of a Series net assets (determined
at the time of the short sale) may be subject to such sales. Short sales will be
make primarily to defer realization of gain or loss for federal tax purposes.
Each Series does not intend to have more than 5% of its net assets (determined
at the time of the short sale) subject to short sales against-the-box.
The staff of the SEC has taken the position that purchased over-the-counter
options and the assets used as cover for written over-the-counter options are
illiquid securities unless a Series and the counterparty have provided for the
Series, at the Series election, to unwind the
<PAGE>
over-the-counter option. The exercise of such an option ordinarily would involve
the payment by the Series of an amount designed to reflect the counterpartys
economic loss from an early termination, but does allow each Series to treat the
assets used as cover as liquid.
Each Series will not change its investment objective without shareholder
approval. If either Series determines that its objective can best be achieved by
a substantive change in investment policy or strategy, the Series may make such
a change without shareholder approval by disclosing it in the prospectus.
RISK FACTORS. If either Series remains small, there is risk that redemptions may
(a) cause portfolio securities to be sold prematurely (at a loss or gain,
depending upon the circumstances) or (b) hamper or prevent a contemplated
portfolio security purchase.
FOREIGN SECURITIES. Securities markets of foreign countries in which each Series
may invest generally are not subject to the same degree of regulation as the
U.S. markets and may be more volatile and less liquid than the major U.S.
markets. There may be less publicly-available information on publicly-traded
companies, banks and governments in foreign countries than generally is the case
for such entities in the United States. The lack of uniform accounting standards
and practices among countries impairs the validity of direct comparisons of
valuation measures (such as price/earnings ratios) for securities in different
countries. Other considerations include political and social instability,
expropriation, higher transaction costs, currency fluctuations, withholding
taxes that cannot be passed through as a tax credit to shareholders and
different securities settlement practices. Foreign securities may be traded on
days that each Series does not value its portfolio securities, and, accordingly,
each Series net asset value may be significantly affected.
Under normal circumstances, each Series will invest primarily in common stocks,
and/or securities convertible into common stocks, which subjects each Series to
market risk, that is, the possibility that common stock prices will decline over
short or even extended periods. Although Mid-Cap Series invests primarily in
middle-sized companies, both the Mid-Cap and Small-Cap Series also may invest,
from time to time, in stocks of large-sized and small-sized companies guided by
the policies mentioned above. Small capitalized companies may offer significant
appreciation potential. However, smaller companies may carry more risk than
larger companies. Generally, small companies rely on limited product lines and
markets, financial resources, or other factors, and this may make them more
susceptible to setbacks or economic downturns. Small capitalized companies may
be more volatile in price, normally have fewer shares outstanding and these
shares trade less frequently than large companies. Therefore, the securities of
smaller companies may be subject to wider price fluctuations. In many instances
the securities of smaller companies are traded over the counter and may not be
traded in the volume typical on a national securities exchange.
RISKS OF HEDGING AND INCOME ENHANCEMENT STRATEGIES OF THE SMALL-CAP SERIES.
Participation in the options or futures markets involves investment risks and
transaction costs to which the Small-Cap Series would not be subject absent the
use of these strategies. If Fund managements prediction of movement in the
direction of the securities markets is inaccurate, the adverse consequences to
the Small-Cap Series may leave it in a worse position than if such strategies
were not used. Risks inherent in the use of options and stock index futures
include (1) dependence on Fund managements ability to predict correctly
movements in the direction of specific securities being hedged or the movement
in stock indices; (2) imperfect correlation between the price of options and
stock index futures and options thereon and movements in the prices of the
securities being hedged; (3) the fact that skills needed to use these strategies
are different from those needed to select portfolio securities; (4) the possible
absence of a liquid secondary market for any particular instrument at any time;
(5) the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences; and (6) daily limits on price variance for a futures
<PAGE>
contract or related options imposed by certain futures exchanges and boards of
trade may restrict transactions in such securities on a particular day. See
Investment Objective and Policies and Taxes in the Statement of Additional
Information.
4 PURCHASES
Each Series shares may only be purchased by employees and partners of Lord
Abbett, directors (trustees) of Lord Abbett-managed funds and spouses and other
family members of such employees, partners and directors (trustees). All shares
may be purchased at the net asset value per share next computed after the order
is received by Lord Abbett. For each Series the minimum initial investment is
$1,000. Subsequent investments may be made in any amount. Place your order with
Lord Abbett or send it to Small-Cap or Mid-Cap Series of the Lord Abbett
Research Fund, Inc. or both, as appropriate (P.O. Box 419100, Kansas City,
Missouri 64141).
The net asset value of each Series shares is calculated every business day as of
the close of the New York Stock Exchange (NYSE), by dividing net assets by
shares outstanding. Securities in each Series portfolio are valued at their
market value as more fully described in the Statement of Additional Information.
A business day is a day on which the NYSE is open for trading. We are not
obligated to maintain the offering or its terms and the offering may be
suspended, changed or withdrawn. Lord Abbett reserves the right to reject any
order. Certificates representing shares of each Series will not be issued. This
will relieve shareholders of the responsibility and inconvenience of safekeeping
share certificates and save the Fund unnecessary expense. If you have any
questions, call the Fund at 800-821-5129.
TELEPHONE EXCHANGE PRIVILEGE: Shares may be exchanged, without a service charge,
for those of any other Lord Abbett-sponsored fund except for (i) Lord Abbett
Equity Fund, Lord Abbett Series Fund and Lord Abbett Counsel Group and (ii)
certain tax-free single-state series where the exchanging shareholder is a
resident of a state in which such series is not offered for sale (together,
Eligible Funds).
You or YOUR REPRESENTATIVE WITH PROPER IDENTIFICATION can instruct the Fund to
exchange shares by telephone. Shareholders have this privilege unless they
refuse it in writing. The Fund will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine and will
employ reasonable procedures to confirm that instructions received are genuine,
including requesting proper identification, and recording all telephone
exchanges. Instructions must be received by the Fund in Kansas City
(800-521-5315) prior to the close of the NYSE to obtain each funds net asset
value per share on that day. Expedited exchanges by telephone may be difficult
to implement in times of drastic economic or market change. The exchange
privilege should not be used to take advantage of short-term swings in the
market. The Fund reserves the right to terminate or limit the privilege of any
shareholder who makes frequent exchanges. The Fund can revoke the privilege for
all shareholders upon 60 days prior written notice. A prospectus for the other
Lord Abbett-sponsored fund selected by you should be obtained and read before an
exchange.
Exercise of the Exchange Privilege will be treated as a sale for federal income
tax purposes and, depending on the circumstances, a capital gain or loss may be
recognized.
5 OUR MANAGEMENT
Our business is managed by our officers on a day-to-day basis under the overall
direction of our Board of Directors with the advice of Lord Abbett (herein
referred to as management). We employ Lord Abbett as investment manager for each
Series pursuant to a Management Agreement. Lord Abbett has been an investment
manager for over 60 years and currently manages approximately $18 billion in a
family of mutual funds and other advisory accounts. Under the Management
Agreement, Lord Abbett is obligated to provide each Series with investment
management services and executive and other personnel, pay the remuneration of
our officers and of our directors affiliated with Lord Abbett, provide us with
office space and pay for ordinary and necessary office and clerical expenses
relating to research, statistical work and supervision of each Series portfolio
and certain other costs. Lord Abbett provides similar services to fifteen other
Lord Abbett-
<PAGE>
sponsored funds having various investment objectives and also advises other
investment clients. Robert P. Fetch, a Lord Abbett employee since August 1995,
is primarily responsible for the day-to-day management of the Small-Cap Series
and has been since its inception. Prior to joining Lord Abbett, Mr. Fetch was a
Managing Director of Prudential Investment Advisors. John J. Walsh, Jr., Lord
Abbett partner for over five years, is primarily responsible for the day-to-day
management of the Mid-Cap Series and has been since inception. Mr. Walsh
delegates management duties with respect to the Mid-Cap Series to a committee
consisting, at any time, of three Lord Abbett employees from the Research
Department. The members of the committee, who also may be officers of the Fund,
have staggered terms to assure continuity and a forum for different judgments as
to what securities represent the greatest investment value for the Mid-Cap
Series.
Under the Management Agreement, each Series is obligated to pay Lord Abbett a
monthly fee based on its average daily net assets for each month at the annual
rate of .75%. Due to the management fee waiver by Lord Abbett, the effective fee
payable to Lord Abbett by each Series as a percentage of average daily net
assets is expected to be at the annual rate of zero percent for the subsequent
year after commencement of operations of each Series. In addition, we pay all
expenses not expressly assumed by Lord Abbett. Each Series ratio of expenses,
including management fee expenses, to average net assets for such one-year
period is expected to be zero percent.
6 DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
With respect to each Series, dividends from taxable net investment income may be
taken in cash or invested in additional shares at net asset value (without a
sales charge) and will be paid to shareholders annually in December.
A long-term capital gains distribution is made when a Series has net profits
during the year from sales of securities which it has held more than one year.
If a Series has realized net short-term capital gains, they also will be
distributed. Any capital gains distributions will be made annually in December.
They may be taken in cash or invested in more shares at net asset value without
a sales charge.
Dividends and distributions declared in October, November or December of any
year will be treated for federal income tax purposes as having been received by
shareholders of a Series in that year if they are paid before February 1 of the
following year. A supplemental capital gains distribution also may be paid in
December.
Each Series intends to meet the requirements of Subchapter M of the Internal
Revenue Code. Each Series will try to distribute to shareholders all of its net
investment income and net realized capital gains, so as to avoid the necessity
of paying federal income tax. Shareholders, however, must report dividends and
capital gains distributions as taxable income. Distributions derived from net
long-term capital gains which are designated by us as capital gains
distributions will be taxable to shareholders as long-term capital gains,
whether received in cash or shares, regardless of how long a taxpayer has held
the shares of a Series. Under current law, net long-term capital gains of
individuals and corporations are taxed at the rates applicable to ordinary
income, except that the maximum rate for long-term capital gains for individuals
is 28%. Legislation is pending in Congress as of the date of this Prospectus,
would have the effect of reducing the federal income tax rate on capital gains.
Shareholders may be subject to a $50 penalty under the Internal Revenue Code and
we may be required to withhold and remit to the U.S. Treasury a portion (31%) of
any redemption or repurchase proceeds and of any dividend or distribution on any
account, where the payee (shareholder) failed to provide a correct taxpayer
identification number or to make certain required certifications.
Limitations imposed by the Internal Revenue Code on regulated investment
companies may restrict each Series ability to engage in transactions in options,
forward contracts and cross hedges.
We will inform shareholders of the federal tax status of each dividend and
distribution after the end of each calendar year.
<PAGE>
Shareholders should consult their tax advisers concerning applicable state and
local taxes as well as on the tax consequences of gains or losses from the
redemption or exchange of our shares.
7 REDEMPTIONS
To obtain the proceeds of an expedited redemption of $50,000 or less, you or
your representative with proper identification can telephone the Fund. This
privilege is automatically extended to all shareholders. The Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine with respect to the Fund and, therefore, will employ
reasonable procedures to confirm that instructions received are genuine,
including requesting proper identification, recording all telephone redemptions
and mailing the proceeds only to the named shareholder at the address appearing
on the account registration.
If you cannot use the expedited redemption procedures described above to redeem
shares directly, send your request to either Small-Cap or Mid-Cap Series of the
Lord Abbett Research Fund, Inc., or both, as appropriate (P.O. Box 419100,
Kansas City, Missouri 64141) with signature(s) and any legal capacity of the
signer(s) guaranteed by an eligible guarantor.
Under certain circumstances and subject to prior written notice, our Board of
Directors may authorize redemption of all of the shares in any account in which
there are fewer than 25 shares.
8 PERFORMANCE
We calculate our average annual total return for each Series for a given period
by determining an annual compounded rate that would cause the hypothetical
initial investment made on the first day of the period to equal the ending
redeemable value. The calculation assumes for the period a $1,000 hypothetical
initial investment in a Series, the reinvestment of all income and capital gains
distributions on the reinvestment dates at the prices calculated as stated in
the Prospectus, and a complete redemption at the end of the period to determine
the ending redeemable value.
Further information about each Series performance will be in its annual report
to shareholders which may be obtained without charge.
Underwriter and Investment Manager
Lord, Abbett & Co.
The General Motors Building
767 Fifth Avenue
New York, New York 10153-0203
212-848-1800
Custodian
The Bank of New York
48 Wall Street
New York, New York 10286
Transfer Agent and Dividend Disbursing Agent
United Missouri Bank of Kansas City, N.A.
Tenth and Grand
Kansas City, Missouri 64141
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419100
Kansas City, Missouri 64141
800-821-5129
Auditors
Deloitte & Touche LLP
<PAGE>
LORD ABBETT
Statement of Additional Information February __, 1996
Lord Abbett
Research Fund, Inc.
This Statement of Additional Information is not a Prospectus. A Prospectus may
be obtained from your securities dealer or from Lord, Abbett & Co. ("Lord
Abbett") at The General Motors Building, 767 Fifth Avenue, New York, New York
10153-0203. This Statement relates to, and should be read in conjunction with,
the Prospectus dated February __, 1996.
Lord Abbett Research Fund, Inc. (sometimes referred to as the "Fund") was
incorporated under Maryland law on April 6, 1992. The Fund's Board of Directors
has authority to classify its shares of common stock into separate Series
without further action by shareholders. To date, 50,000,000 shares of Large-Cap
Series (formerly Series 1); 50,000,000 shares of Mid-Cap Series (formerly Lord
Abbett Mid-Cap Research Fund) and 50,000 shares of a new Series - Small-Cap
Series - have been designated by the Board of Directors. Although no present
plans exist, further series may be added in the future. The Investment Company
Act of 1940 (the "Act") requires that where more than one series exists, each
series must be preferred over all other series with respect to assets
specifically allocated to such series. Only Small-Cap and Mid-Cap Series
(sometimes collectively referred to as the "Series" or "we" and sometimes
individually as "Small-Cap Series", "Mid-Cap Series" or "each Series") are
described in this Statement of Additional Information.
Rule 18f-2 under the Act provides that any matter required to be submitted by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company, such as the Fund,
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each Series affected by such
matter. Rule 18f-2 further provides that a Series shall be deemed to be affected
by a matter unless the interests of each Series in the matter are identical or
the matter does not affect any interest of such Series. However, the Rule
exempts from these separate voting requirements the selection of independent
public accountants, the approval of principal distributing contracts and the
election of directors.
Shareholder inquiries should be made by writing directly to the Fund or by
calling 800-821-5129. In addition, you can make inquiries through Lord Abbett.
TABLE OF CONTENTS PAGE
1. Investment Objectives and Policies 2
2. Directors and Officers 8
3. Investment Advisory and Other Services 10
4. Portfolio Transactions 11
5. Purchases, Redemptions
and Shareholder Services 12
6. Past Performance 13
7. Taxes 13
8. Information About The Fund 14
9. Financial Statements 15
<PAGE>
1.
Investment Objectives and Policies
Fundamental Investment Restrictions. Each Series' investment objective and
policies are described in the Prospectus under "How We Invest". In addition to
those policies described in the Prospectus, each Series is subject to the
following fundamental investment restrictions which cannot be changed for each
Series without the approval of the holders of a majority of the Series'
respective shares. Each Series may not: (1) borrow money (except that (i) each
Series may borrow from banks (as defined in the Act) in amounts up to 33 1/3% of
its total assets (including the amount borrowed), (ii) each Series may borrow up
to an additional 5% of its total assets for temporary purposes, (iii) each
Series may obtain such short-term credit as may be necessary for the clearance
of purchases and sales of portfolio securities and (iv) each Series may purchase
securities on margin to the extent permitted by applicable law); (2) pledge its
assets (other than to secure such borrowings or, to the extent permitted by each
Series' investment policies as set forth in its prospectus and statement of
additional information, as they may be amended from time to time, in connection
with hedging transactions, short sales, when-issued and forward commitment
transactions and similar investment strategies); (3) engage in the underwriting
of securities except pursuant to a merger or acquisition or to the extent that
in connection with the disposition of its portfolio securities it may be deemed
to be an underwriter under federal securities laws; (4) make loans to other
persons, except that the acquisition of bonds, debentures or other corporate
debt securities and investment in government obligations, commercial paper,
pass-through instruments, certificates of deposit, bankers acceptances,
repurchase agreements or any similar instruments shall not be deemed to be the
making of a loan, and except further that each Series may lend its portfolio
securities, provided that the lending of portfolio securities may be made only
in accordance with applicable law and the guidelines set forth in each Series'
prospectus and statement of additional information, as they may be amended from
time to time; (5) buy or sell real estate (except that each Series may invest in
securities directly or indirectly secured by real estate or interests therein or
issued by companies which invest in real estate or interests therein),
commodities or commodity contracts (except to the extent each Series may do so
in accordance with applicable law and without registering as a commodity pool
operator under the Commodity Exchange Act as, for example, with futures
contracts); (6) with respect to 75% of the gross assets of each Series, buy
securities if the purchase would then cause it to (i) have more than 5% of its
gross assets, at market value at the time of investment, invested in the
securities of any one issuer except securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or (ii) own more than 10% of the
voting securities of any issuer; (7) invest more than 25% of its assets, taken
at market value, in the securities of issuers in any particular industry
(excluding securities of the U.S. Government, its agencies and
instrumentalities);or (8) issue senior securities to the extent such issuance
would violate applicable law.
With respect to the restrictions mentioned herein, compliance therewith will not
be affected by change in the market value of portfolio securities but will be
determined at the time of purchase or sale of such securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. In addition to those policies described
in the Prospectus and the investment restrictions above which cannot be changed
without shareholder approval, each Series also is subject to the following
non-fundamental investment policies which may be changed by the Board of
Directors without shareholder approval. Each Series may not: (1) make short
sales of securities or maintain a short position except to the extent permitted
by applicable law; (2) invest knowingly more than 15% of its net assets (at the
time of investment) in illiquid securities (securities qualifying for resale
under Rule 144A of the Securities Act of 1933 ("Rule 144A") that are determined
by the Directors, or by Lord Abbett pursuant to delegated authority, to be
liquid are considered liquid securities); (3) invest in securities issued by
other investment companies as defined in the Act, except as permitted by the
Act; (4) purchase securities of any issuer unless it or its predecessor has a
record of three years' continuous operation, except that each Series may
purchase securities of such issuers through subscription offers or other rights
it receives as a security holder of companies offering such subscriptions or
rights, and such purchases will then be limited in the aggregate to 5% of each
Series' net assets at the time of investment; (5) hold securities of any issuer
when more than 1/2 of 1% of the issuer's securities are owned beneficially by
one or more of the Fund's officers or directors or by one or more partners of
the Fund's underwriter or investment adviser if these owners in the aggregate
own beneficially more than 5% of such securities; (6) invest in warrants, valued
at the lower of cost or market, to exceed 5% of each Series' net assets,
including warrants not listed on the New York or American Stock Exchange which
may not exceed 2% of such net assets; or (7) invest in real estate limited
partnership interests or interest in oil, gas or other mineral leases, or
exploration or development programs, except that each Series may invest in
securities issued by companies that engage in oil, gas or other mineral
exploration or development activities.
<PAGE>
INVESTMENT TECHNIQUES WHICH MAY BE USED BY EACH SERIES
LENDING OF PORTFOLIO SECURITIES. Although each Series has no current intention
of doing so in the foreseeable future, each Series may seek to earn income by
lending portfolio securities. Under present regulatory policies, such loans may
be made to member firms of the New York Stock Exchange ("NYSE") and are required
to be secured continuously by collateral consisting of cash, cash equivalents,
or United States Treasury bills maintained in an amount at least equal to the
market value of the securities loaned. Each Series will have the right to call a
loan and obtain the securities loaned at any time upon five days' notice. During
the existence of a loan a Series will receive the income earned on investment of
collateral. The aggregate value of the securities loaned will not exceed 5% of
the value of a Series' gross assets.
If a Series enters into repurchase agreements as provided in clause (4) above,
it will do so only with those primary reporting dealers that report to the
Federal Reserve Bank of New York and with the 100 largest United States
commercial banks and the underlying securities purchased under the agreements
will consist only of those securities in which the Series otherwise may invest.
FOREIGN CURRENCY HEDGING TECHNIQUES. Each Series may utilize various foreign
currency hedging techniques described below, including forward foreign currency
contracts and foreign currency put and call options.
FORWARD FOREIGN CURRENCY CONTRACTS. A forward foreign currency contract involves
an obligation to purchase or sell a specific amount of a specific currency at a
set price at a future date. Each Series expects to enter into forward foreign
currency contracts in primarily two circumstances. First, when a Series enters
into a contract for the purchase or sale of a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale of the amount of
foreign currency involved in the underlying security transaction, a Series will
be able to protect against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the subject foreign currency during
the period between the date the security is purchased or sold and the date on
which payment is made or received.
Second, when management believes that the currency of a particular foreign
country may suffer a decline against the U.S. dollar, a Series may enter into a
forward contract to sell the amount of foreign currency approximating the value
of some or all of the Series' portfolio securities denominated in such foreign
currency or, in the alternative, the Series may use a cross-hedging technique
whereby it sells another currency which the Series expects to decline in a
similar way but which has a lower transaction cost. Precise matching of the
forward contract amount and the value of the securities involved will not
generally be possible since the future value of such securities denominated in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the forward contract is entered into and
the date it matures. Each Series does not intend to enter into such forward
contracts under this second circumstance on a continuous basis.
FOREIGN CURRENCY PUT AND CALL OPTIONS. Each Series also may purchase foreign
currency put options and write foreign currency call options on U.S. exchanges
or U.S. over-the-counter markets. A put option gives a Series, upon payment of a
premium, the right to sell a currency at the exercise price until the expiration
of the option and serves to insure against adverse currency price movements in
the underlying portfolio assets denominated in that currency.
Exchange-listed options markets in the United States include several major
currencies, and trading may be thin and illiquid. A number of major investment
firms trade unlisted options which are more flexible than exchange-listed
options with respect to strike price and maturity date. Unlisted options
generally are available in a wider range of currencies. Unlisted foreign
currency options are generally less liquid than listed options and involve the
credit risk associated with the individual issuer. Unlisted options, together
with other illiquid securities, are subject to a limit of 15% of a Series' net
assets.
A call option written by a Series gives the purchaser, upon payment of a
premium, the right to purchase from the Series a currency at the exercise price
<PAGE>
until the expiration of the option. Each Series may write a call option on a
foreign currency only in conjunction with a purchase of a put option on that
currency. Such a strategy is designed to reduce the cost of downside currency
protection by limiting currency appreciation potential. The face value of such
writing may not exceed 90% of the value of the securities denominated in such
currency invested in by a Series or in such cross currency (referred to above)
to cover such call writing.
The Fund's custodian will segregate cash or liquid high-grade debt securities
belonging to a Series in an amount not less than that required by SEC Release
10666 with respect to a Series' assets committed to (a) writing options, (b)
forward foreign currency contracts and (c) cross hedges entered into by a
Series. If the value of the securities segregated declines, additional cash or
debt securities will be added on a daily basis (i.e., marked to market), so that
the segregated amount will not be less than the amount of a Series' commitments
with respect to such written options, forward foreign currency contracts and
cross hedges.
LIMITATIONS ON SMALL-CAP SERIES' PURCHASE AND SALE OF STOCK OPTIONS, OPTIONS ON
STOCK INDICES AND STOCK INDEX FUTURES
The Small-Cap Series may write put and call options on stocks only if they are
covered, and such options must remain covered so long as the Small-Cap Series is
obligated as a writer. The Small-Cap Series will not (a) write puts having
aggregate exercise price greater than 25% of total net assets; or (b) purchase
(i) put options on stocks not held in the Small-Cap Series portfolio, (ii) put
options on stock indices or (iii) call options on stocks or stock indices if,
after any such purchase, the aggregate premiums paid for such options would
exceed 20% of the Small Cap Series' total net assets.
SMALL CAP-SERIES' CALL OPTIONS ON STOCK. The Small-Cap Series may, from time to
time, write call options on its portfolio securities. The Small-Cap Series may
write only call options which are "covered," meaning that the Small-Cap Series
either owns the underlying security or has an absolute and immediate right to
acquire that security, without additional cash consideration, upon conversion or
exchange of other securities currently held in its portfolio. In addition, the
Small-Cap Series will not permit the call to become uncovered prior to the
expiration of the option or termination through a closing purchase transaction
as described below. If the Small-Cap Series writes a call option, the purchaser
of the option has the right to buy (and the Small-Cap Series has the obligation
to sell) the underlying security at the exercise price throughout the term of
the option. The amount paid to the Small-Cap Series by the purchaser of the
option is the "premium." The Small-Cap Series obligation to deliver the
underlying security against payment of the exercise price would terminate either
upon expiration of the option or earlier if the Small-Cap Series were to effect
a "closing purchase transaction" through the purchase of an equivalent option on
an exchange. There can be no assurance that a closing purchase transaction can
be effected.
The Small-Cap Series would not be able to effect a closing purchase transaction
after it had received notice of exercise. In order to write a call option, the
Small-Cap Series is required to comply with the rules of The Options Clearing
Corporation and the various exchanges with respect to collateral requirements.
The Small-Cap Series may not purchase call options except in connection with a
closing purchase transaction. It is possible that the cost of effecting a
closing purchase transaction may be greater than the premium received by the
Small-Cap Series for writing the option.
Generally, the Small-Cap Series intends to write listed covered call options
during periods when it anticipates declines in the market values of portfolio
securities because the premiums received may offset to some extent the decline
in the Small-Cap Series net asset value occasioned by such declines in market
value. Except as part of the "sell discipline" described below, the Small-Cap
Series will generally not write listed covered call options when it anticipates
that the market values of the Small-Cap Series' portfolio securities will
increase.
One reason for the Small-Cap Series to write call options is as part of a "sell
discipline." If the Small-Cap Series decides that a portfolio security would be
overvalued and should be sold at a certain price higher than the current price,
the Small-Cap Series could write an option on the stock at the higher price.
Should the stock subsequently reach that price and the option be exercised, the
Small-Cap Series would, in effect, have increased the selling price of that
stock, which it would have sold at that price in any event, by the amount of the
premium. In the event the market price of the stock declined and the option were
not exercised, the premium would offset all or some portion of the decline. It
is possible that the price of the stock could increase beyond the exercise
price; in that event, the Small-Cap Series would forego the opportunity to sell
the stock at that higher price.
<PAGE>
In addition, call options may be used as part of a different strategy in
connection with sales of portfolio securities. If, in the judgment of the
Small-Cap Series, the market price of a stock is overvalued and it should be
sold, the Small-Cap Series may elect to write a call option with an exercise
price substantially below the current market price. As long as the value of the
underlying security remains above the exercise price during the term of the
option, the option will, in all probability, be exercised, in which case the
Small-Cap Series will be required to sell the stock at the exercise price. If
the sum of the premium and the exercise price exceeds the market price of the
stock at the time the call option is written, the Small-Cap Series would, in
effect, have increased the selling price of the stock. The Small-Cap Series
would not write a call option in these circumstances if the sum of the premium
and the exercise price were less than the current market price of the stock.
SMALL-CAP SERIES' PUT OPTIONS ON STOCK. The Small-Cap Series may also write
listed put options. If the Small-Cap Series writes a put option, it is obligated
to purchase a given security at a specified price at any time during the term of
the option.
Writing listed put options is a useful portfolio investment strategy when the
Small-Cap Series has cash or other reserves available for investment as a result
of sales of Small-Cap Series shares or, more importantly, because the Fund
management believes a more defensive and less fully invested position is
desirable in light of market conditions. If the Small-Cap Series wishes to
invest its cash or reserves in a particular security at a price lower than
current market value, it may write a put option on that security at an exercise
price which reflects the lower price it is willing to pay. The buyer of the put
option generally will not exercise the option unless the market price of the
underlying security declines to a price near or below the exercise price. If the
Small-Cap Series writes a listed put, the price of the underlying stock declines
and the option is exercised, the premium, net of transaction charges, will
reduce the purchase price paid by the Small-Cap Series for the stock. The price
of the stock may decline by an amount in excess of the premium, in which event
the Small-Cap Series would have foregone an opportunity to purchase the stock at
a lower price.
If, prior to the exercise of a put option, the Small-Cap Series determines that
it no longer wishes to invest in the stock on which the put option had been
written, the Small-Cap Series may be able to effect a closing purchase
transaction on an exchange by purchasing a put option of the same series as the
one which it has previously written. The cost of effecting a closing purchase
transaction may be greater than the premium received on writing the put option
and there is no guarantee that a closing purchase transaction can be effected.
At the time a put option is written, the Small-Cap Series will be required to
establish, and will maintain until the put is exercised or has expired, a
segregated account with its custodian consisting of cash, short-term U.S.
Government securities or other high-grade short-term debt obligations equal in
value to the amount the Small-Cap Series will be obligated to pay upon exercise
of the put option.
SMALL- CAP SERIES' STOCK INDEX OPTIONS. Except as describe below, the Small-Cap
Series will write call options on indices only if on such date it holds a
portfolio of stocks at least equal to the value of the index times the
multiplier times the number of contracts. When the Small-Cap Series writes a
call option on a broadly-based stock market index, the Small-Cap Series will
segregate or put into escrow with its Custodian, or pledge to a broker as
collateral for the option, one or more "qualified securities" with a market
value at the time the option is written of not less than 100% of the current
index value times the multiplier times the number of contracts.
If the Small-Cap Series has written an option on an industry or market segment
index, it will segregate or put into escrow with its Custodian, or pledge to a
broker as collateral for the option, at least ten "qualified securities," which
are securities of an issuer in such industry or market segment, with a market
value at the time the option is written of not less than 100% of the current
index value times the multiplier times the number of contracts. Such securities
will include stocks which represent at least 50% of the weighing of the industry
or market segment index and will represent at least 50% of the Small-Cap Series
holdings in that industry or market segment. No individual security will
represent more than 25% of the amount so segregated, pledged or escrowed. If at
the close of business on any day the market value of such qualified securities
so segregated, escrowed or pledged falls below 100% of the current index value
times the multiplier times the number of contracts, the Small-Cap Series will so
segregate, escrow or pledge an amount in cash, Treasury bills or other
high-grade short-term obligations equal in value to the difference. In addition,
when the Small-Cap Series writes a call on an index which is in-the-money at the
time the call is written, the Small-Cap Series will segregate with its Custodian
or pledge to the broker as collateral cash, short term U.S. Government
securities or other high-grade short-term debt obligations equal in value to the
<PAGE>
amount by which the call is in-the-money times the multiplier times the number
of contracts. Any amount segregated pursuant to the foregoing sentence may be
applied to the Small-Cap Series' obligation to segregate additional amounts in
the event that the market value of the qualified securities falls below 100% of
the current index value times the multiplier times the number of contracts. A
"qualified security" is an equity security which is listed on a national
securities exchange or listed on the National Association of Securities Dealers
Automated Quotation System against which the Small-Cap Series has not written a
stock call option and which has not been hedged by the Small-Cap Series by the
sale of stock index futures. However, if the Small-Cap Series holds a call on
the same index as the call written where the exercise price of the call held is
equal to or less than the exercise price of the call written or greater than the
exercise price of the call written if the difference is maintained by the
Small-Cap Series in cash, treasury bills or other high-grade short-term
obligations in a segregated account with its Custodian, it will not be subject
to the requirements describe in this paragraph.
SMALL-CAP SERIES' STOCK INDEX FUTURES. The Small-Cap Series will engage in
transactions in stock index futures contracts as a hedge against changes
resulting from market conditions in the values of securities which are held in
the Small-Cap Series' portfolio or which it intends to purchase. The Small-Cap
Series will engage in such transactions when they are economically appropriate
for the reduction of risks inherent in the ongoing management of the Small-Cap
Series. The Small-Cap Series may not purchase or sell stock index futures if,
immediately thereafter, more than one-third of its net assets would be hedged
and, in addition, except as described above in the case of a call written and
held on the same index, will write call options on indices or sell stock index
futures only if the amount resulting from the multiplication of the then current
level of the index (or indices) upon which the option or future contract(s) is
based, the applicable multiplier(s), and the number of futures or options
contracts which would be outstanding, would not exceed one-third of the value of
the Small-Cap Series' net assets. In instances involving the purchase of stock
index futures contracts by the Small-Cap Series', an mount of cash, short-term
U.S. Government securities or other high-grade short-term debt obligations,
equal to the market value of the futures contracts, will be deposited in a
segregated account with the Small-Cap Series Custodian and/or in a margin
account with a broker to collateralize the position and thereby insure that the
use of such futures is unleveraged.
Under regulations of the Commodity Exchange Act, investment companies registered
under the Investment Company Act of 1940 as amended (the Investment Company
Act), are exempt from the definition of "commodity pool operator," provided all
of the Small-Cap Series' commodity futures or commodity options transactions
constitute bona fide hedging transactions within the meaning of the CFTC's
regulations. The Small-Cap Series will use stock index futures and options on
futures as described herein in a manner consistent with this requirement.
SMALL-CAP SERIES' RISKS OF TRANSACTIONS IN STOCK OPTIONS. Writing options
involves the risk that there will be no market in which to effect a closing
transaction. An option position may be closed out only on an exchange which
provides a secondary market for an option of the same series. Although the
Small-Cap Series will generally write only those options for which there appears
to be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any particular
time, and for some options no secondary market on an exchange may exist. If the
Small-Cap Series as a covered call option writer is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise. Small-Cap Series' Risks of Options on Indices. The
Small-Cap Series' purchase and sale of options on indices will be subject to
risks described above under "Small-Cap Series' Risk of Transactions in Stock
Options." In addition, the distinctive characteristics of options on indices
create certain risks that are not present with stock options.
Because the value of an index option depends upon movements in the level of the
index rather than the price of a particular stock, whether the Small-Cap Series
will realize a gain or loss on the purchase or sale of an option on an index
depends upon movements in the level of stock prices in the stock market
generally or in an industry or market segment rather than movements in the price
of a particular stock. Accordingly, successful use by the Small-Cap Series of
options on indices would be subject to the investment adviser's ability to
predict correctly movements in the direction of the stock market generally or of
a particular industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.
<PAGE>
Index prices may be distorted if trading of certain stocks included in the index
is interrupted. Trading in the index option also may be interrupted in certain
circumstances, such as if trading were halted in a substantial number of stocks
included in the index. If this occurred, the Small-Cap Series would not be able
to close out options which it had purchased or written and, if restrictions on
exercise were imposed, may be unable to exercise an option it holds, which could
result in substantial losses to the Small-Cap Series. It is the Small-Cap
Series' policy to purchase or write options only on indices which include a
number of stocks sufficient to minimize the likelihood of a trading halt in the
index.
Trading in index options commenced in April 1983 with the S&P 100 option
(formerly called the CBOE 100). Since that time a number of additional index
option contracts have been introduced including options on industry indices.
Although the markets for certain index option contracts have developed rapidly,
the markets for other index options are still relatively illiquid. The ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
this market will develop in all index option contracts. The Small-Cap Series
will not purchase or sell any index option contract unless and until, in
Small-Cap Series' opinion, the market for such options has developed
sufficiently that such risk in connection with such transactions in no greater
than such risk in connection with options on stocks.
SMALL-CAP SERIES' SPECIAL RISKS OF WRITING CALLS ON INDICES. Because exercises
of index options are settled in cash, a call writer such as the Small-Cap Series
cannot determine the amount of its settlement obligations in advance and, unlike
call writing on specific stocks, cannot provide in advance for, or cover, its
potential settlement obligations by acquiring and holding the underlying
securities. However, the Small-Cap Series will write call options on indices
only under the circumstances described above under "Limitations on Small-Cap
Series' Purchase and Sale of Stock Options, Options on Stock Indices, Stock
Index Futures and Options on Stock Index Futures."
Price movements in the Small-Cap Series' portfolio probably will not correlate
precisely with movements in the level of the index and, therefore, the Small-Cap
Series bears the risk that the price of the securities held by the Small-Cap
Series may not increase as much as the index. In such event the Small-Cap Series
would bear a loss on the call which is not completely offset by movements in the
price of the Small-Cap Series' portfolio. It is also possible that the index may
rise when the Small-Cap Series' portfolio of stocks does not rise. If this
occurred, the Small-Cap Series would experience a loss on the call which is not
offset by an increase in the value of its portfolio and might also experience a
loss in its portfolio. However, because the value of a diversified portfolio
will, over time, tend to move in the same direction as the market, movements in
the value of the Small-Cap Series in the opposite direction as the market would
be likely to occur for only a short period or to a small degree.
Unless the Small-Cap Series has other liquid assets which are sufficient to
satisfy the exercise of a call, the Small-Cap Series would be required to
liquidate portfolio securities in order to satisfy the exercise. Because an
exercise must be settled within hours after receiving the notice of exercise, if
the Small-Cap Series fails to anticipate an exercise, it may have to borrow (in
amounts not exceeding 20% of the Small-Cap Series' total assets) pending
settlement of the sale of securities in its portfolio and would incur interest
charges thereon.
When the Small-Cap Series has written a call, there is also a risk that the
market may decline between the time the Small-Cap Series is able to sell stocks
in its portfolio. As with stock options, the Small-Cap Series will not learn
that an index option has been exercised until the day following the exercise
date but, unlike a call on stock where the Small-Cap Series would be able to
deliver the underlying securities in settlement, the Small-Cap Series may have
to sell part of its stock portfolio in order to make settlement in cash, and the
price of such stocks might decline before they can be sold. This timing risk
makes certain strategies involving more than one option substantially more risky
with index options than with stock options. For example, even if an index call
which the Small-Cap Series has written is "covered" by an index call held by the
Small-Cap Series with the same strike price, the Small-Cap Series will bear the
risk that the level of the index may decline between the close of trading on the
date the exercise notice is filed with the clearing corporation and the close of
trading on the date the Small-Cap Series exercises the call it holds or the time
the Small-Cap Series sells the call which in either case would occur no earlier
than the day following the day the exercise notice was filed.
SMALL-CAP SERIES' SPECIAL RISKS OF PURCHASING PUTS AND CALLS ON INDICES. If the
Small-Cap Series holds an index option and exercises it before final
determination of the closing index value for that day, it runs the risk that the
level of the underlying
<PAGE>
index may change before closing. If such a change causes the exercised option to
fall out-of-the-money, the Small-Cap Series will be required to pay the
difference between the closing index value and the exercise price of the option
(times the applicable multiple) to the assigned writer. Although the Small-Cap
Series may be able to minimize this risk by withholding exercise instructions
until just before the daily cut off time or by selling rather than exercising an
option when the index level is close to the exercise price it may not be
possible to eliminate this risk entirely because the cut off times for index
options may be earlier than those fixed for other types of options and may occur
before definitive closing index values are announced.
2.
Directors and Officers
The following directors are partners of Lord Abbett, The General Motors
Building, 767 Fifth Avenue, New York, New York 10153-0203. They have been
associated with Lord Abbett for over five years and are also officers and/or
directors or trustees of the fifteen other Lord Abbett-sponsored funds. They are
"interested persons" as defined in the Investment Company Act of 1940 (the
"Act") as amended, and as such , may be considered to have an indirect financial
interest in the Rule 12b-1 Plan described in the Prospectus.
Ronald P. Lynch, age 60, Chairman and President
Robert S. Dow, age 50, President
Thomas S. Henderson, age 64, Vice President
The following outside directors are also directors or trustees of the fifteen
other Lord Abbett-sponsored funds referred to above.
E. Thayer Bigelow
Time Warner Cable
300 First Stamford Place
Stamford, Connecticut
President and Chief Executive Officer of Time Warner Cable Programming, Inc.
Formerly President and Chief Operating Officer of Home Box Office, Inc. Age 54.
Stewart S. Dixon
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive (Suite 2800)
Chicago, Illinois
Partner in the law firm of Wildman, Harrold, Allen & Dixon. Age 65.
John C. Jansing
162 S. Beach Road
Hobe Sound, Florida
Retired. Former Chairman of Independent Election Corporation of America, a proxy
tabulating firm. Age 70.
C. Alan MacDonald
The Marketing Partnership, Inc.
27 Signal Road
Stamford, Connecticut
General Partner, The Marketing Partnership, Inc., a full service marketing
consulting firm that specializes in strategic planning and customer-specific
marketing. Formerly Acquisition Consultant, The Noel Group, a private consulting
firm (1994). Formerly Chairman and Chief Executive Officer of Lincoln Foods,
<PAGE>
Inc., manufacturer of branded snack foods (1992-1994). Formerly President and
Chief Executive Officer of Nestle Foods Corporation, a subsidiary of Nestle S.A.
(Switzerland). Age 62.
Hansel B. Millican, Jr.
Rochester Button Company
1100 Noblin Avenue
South Boston, Virginia
President and Chief Executive Officer of Rochester Button Company. Age 67.
Thomas J. Neff
Spencer Stuart & Associates
277 Park Avenue
New York, New York
President of Spencer Stuart & Associates, an executive search consulting firm.
Age 58.
Neither the outside directors nor the directors of the Fund associated with Lord
Abbett nor the officers of the Fund received any compensation from the Fund nor
participated in any retirement plan for acting as a director or officer of the
Fund. The third and fourth columns set forth information with respect to the
retirement plan for outside directors maintained by the other Lord
Abbett-sponsored funds. The fifth column sets forth the total compensation
payable by such funds to the outside directors.
<TABLE>
<CAPTION>
For the Fiscal Year Ended November 30, 1995
- ----------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Estimated Annual For Year Ended
Pension or Benefits Upon December 31, 1995
Retirement Benefits Retirement Proposed Total Compensation
Aggregate Accrued by the to be Paid by the Accrued by the
Compensation Fifteen Other Lord Fifteen Other Fifteen Other Lord
Accrued by Abbett-sponsored Lord Abbett- Abbett-sponsored
Name of Director the Fund1 Funds sponsored Funds2 Funds3
- ---------------- ------------- ----- ------------------- ---------------------
<S> <C> <C> <C> <C>
E. Thayer Bigelow4 none $ $ $
Stewart S. Dixon4 none $ $ $
John C. Jansing4 none $ $ $
C. Alan MacDonald4 none $ $ $
Hansel B. Millican, Jr.4 none $ $ $
Thomas J. Neff4 none $ $ $
<FN>
1. The Fund paid no fees to outside directors. However, outside directors' fees
paid by each other Lord Abbett-sponsored fund, including attendance fees for
board and committee meetings, are allocated among all other Lord
Abbett-sponsored funds based on net assets of each fund. Fees payable by each
other Lord Abbett-sponsored fund to its outside directors are being deferred
under a plan that deems the deferred amounts to be invested in shares of each
fund for later distribution to the directors.
2. The Fund has no retirement plan for outside directors. However, each other
Lord Abbett-sponsored fund has a retirement plan providing that outside
directors will receive annual retirement benefits for life equal to 80% of
their final annual retainers following retirement at or after age 72 with at
least 10 years of service. Each plan also provides for a reduced benefit upon
early retirement under certain circumstances, a pre-retirement death benefit
and actuarially reduced joint-and-survivor spousal benefits. The amounts
stated would be payable annually under such retirement plans if the director
were to retire at age 72 and the annual retainers payable by such funds were
the same as they are today. The amounts accrued in column 3 were accrued by
the other Lord Abbett-sponsored funds during the fiscal year ended November
30, 1995 with respect to the retirement benefits in column 4.
<PAGE>
3. This column shows aggregate compensation, including director's fees and
attendance fees for board and committee meetings, of a nature referred to in
footnote one, accrued by the other Lord Abbett-sponsored funds during the
year ended December 31, 1995.
4. Messrs. Bigelow, Dixon, Jansing and MacDonald, outside directors, and Messrs.
Dow and Henderson, inside directors, were elected as directors of the Fund on
__________ _____, 1996. Messrs. Millican and Neff, outside directors, and Mr.
Lynch, inside director, have been Fund directors since its inception.
</FN>
</TABLE>
Except where indicated, the following executive officers of the Fund have been
associated with Lord Abbett for over five years. Of the following, Messrs.
Allen, Carper, Cutler, Dow, Henderson, Morris, Nordberg and Walsh are partners
of Lord Abbett; the others are employees: William T. Hudson, age 53, Executive
Vice President; Kenneth B. Cutler, age 63, Vice President and Secretary; Stephen
I. Allen, age 41; Daniel E. Carper, age 43; Robert S. Dow, age 50; Thomas S.
Henderson, age 63; Robert G. Morris, age 51, E. Wayne Nordberg, age 57; John J.
Gargana, Jr., age 63; Paul A. Hilstad, age 53 (with Lord Abbett since 1995 -
formerly Senior Vice President and General Counsel of American Capital
Management & Research, Inc.); Thomas F. Konop, age 53; Victor W. Pizzolato, age
62; John J. Walsh, age 58, Vice Presidents; and Keith F. O'Connor, age 40,
Treasurer.
The Fund's By-Laws provide that the Fund shall not hold an annual meeting of its
stockholders in any year unless one or more matters are required to be acted on
by stockholders under the Investment Company Act of 1940, as amended (the
"Act"), or unless called by a majority of the Board of Directors or by
stockholders holding at least one quarter of the stock of the Fund outstanding
and entitled to vote at the meeting. When any such annual meeting is held, the
stockholders will elect directors and vote on the approval of the independent
auditors of the Fund.
As of January 1, 1996 our officers and directors as a group owned less than
_____% of our outstanding shares.
3.
Investment Advisory and Other Services
As described under "Our Management" in the Prospectus, Lord Abbett is the Fund's
investment manager. The nine general partners of Lord Abbett, all of whom are
officers and/or directors of the Fund, are: Stephen I. Allen, Daniel E. Carper,
Kenneth B. Cutler, Robert S. Dow, Thomas S. Henderson, Ronald P. Lynch, Robert
G. Morris, E. Wayne Nordberg and John J. Walsh. The address of each partner is
The General Motors Building, 767 Fifth Avenue, New York, New York 10153-0203.
The services performed by Lord Abbett are described under "Our Management" in
the Prospectus. Under the Management Agreement, each of us is obligated to pay
Lord Abbett a monthly fee, based on average daily net assets for each month, at
the annual rate of .75 of 1% of each Series' average daily net assets. For the
period from August 1, 1995 (commencement of operations) through November 30,
1995, this management fee was waived by Lord Abbett with respect to the Mid-Cap
Series and, except for this waiver, would have amounted to $______.
Each of us is obligated to pay all expenses not expressly assumed by Lord
Abbett, including, without limitation, 12b-1 expenses, outside directors' fees
and expenses, association membership dues, legal and auditing fees, taxes,
transfer and dividend disbursing agent fees, shareholder servicing costs,
expenses relating to shareholder meetings, expenses of preparing, printing and
mailing stock certificates and shareholder reports, expenses of registering each
Series' shares under federal and state securities laws, expenses of preparing,
printing and mailing prospectuses to existing shareholders, insurance premiums,
brokerage and other expenses connected with executing portfolio transactions.
For the period from August 1, 1995 (commencement of operations) through November
30, 1995, Lord Abbett, although not obligated to, voluntarily assumed the
above-mentioned expenses which, if not so assumed, would have amounted to
$_________ with respect to the Mid-Cap Series.
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 are
the independent auditors of the Fund and must be approved at least annually by
our Board of Directors to continue in such capacity. They perform audit services
for the Fund including the examination of financial statements included in our
annual report to shareholders.
<PAGE>
The Bank of New York ("BONY"), 48 Wall Street, New York, New York, is the Fund's
custodian. In accordance with the requirements of Rule 17f-5, the Fund's
directors have approved arrangements permitting the Fund's foreign assets not
held by BONY or its foreign branches to be held by certain qualified foreign
banks and depositories.
4.
Portfolio Transactions
Our policy is to obtain best execution on all our portfolio transactions, which
means that we seek to have purchases and sales of portfolio securities executed
at the most favorable prices, considering all costs of the transaction including
brokerage commissions and dealer markups and markdowns and taking into account
the full range and quality of the brokers' services. Consistent with obtaining
best execution, we pay a commission rate determined to attract the services we
require, as described below. That rate may be higher or lower than other brokers
might charge on the same transactions. Our policy with respect to best execution
governs the selection of brokers or dealers and the market in which the
transaction is executed. To the extent permitted by law, we may, if considered
advantageous, make a purchase from or sale to another Lord Abbett-sponsored fund
without the intervention of any broker-dealer.
Broker-dealers are selected on the basis of their professional capability and
the value and quality of their brokerage and research services. Normally, the
selection is made by traders who are officers of the Fund and also are employees
of Lord Abbett. These traders do the trading as well for other accounts --
investment companies (of which they are also officers) and other investment
clients -- managed by Lord Abbett. They are responsible for obtaining best
execution.
We pay a commission rate that we believe is appropriate to give maximum
assurance that our brokers will provide us, on a continuing basis, the highest
level of brokerage services available. While we do not always seek the lowest
possible commissions on particular trades, we believe that our commission rates
are in line with the rates that many other institutions pay. Our traders are
authorized to pay brokerage commissions in excess of those that other brokers
might accept on the same transactions in recognition of the value of the
services performed by the executing brokers, viewed in terms of either the
particular transaction or the overall responsibilities of Lord Abbett with
respect to us and the other accounts they manage. Such services include showing
us trading opportunities in a timely manner, including blocks, a willingness and
ability to take positions in securities, knowledge of a particular security or
market proven ability to handle a particular type of trade, confidential
treatment, promptness and reliability.
Some of these brokers also provide research services at least some of which are
useful to Lord Abbett in their overall responsibilities with respect to us and
the other accounts they manage. Research includes the furnishing of analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and trading equipment and
computer software packages, acquired from third-party suppliers, that enable
Lord Abbett to access various information bases. Such services may be used by
Lord Abbett in servicing all their accounts, and not all of such services will
necessarily be used by Lord Abbett in connection with their management of the
Fund; conversely, such services furnished in connection with brokerage on other
accounts managed by Lord Abbett may be used in connection with their management
of the Fund, and not all of such services will necessarily be used by Lord
Abbett in connection with their advisory services to such other accounts. We
have been advised by Lord Abbett that research services received from brokers
cannot be allocated to any particular account, are not a substitute for Lord
Abbett's services but are supplemental to their own research effort and when
utilized, are subject to internal analysis before being incorporated by Lord
Abbett into their investment process. As a practical matter, it would not be
possible for Lord Abbett to generate all of the information presently provided
by brokers. While receipt of research services from brokerage firms has not
reduced Lord Abbett's normal research activities, the expenses of Lord Abbett
could be materially increased if it attempted to generate such additional
information through its own staff and purchased such equipment and software
packages directly from the suppliers.
No commitments are made regarding the allocation of brokerage business to or
among brokers, and trades are executed only when they are dictated by investment
decisions of the Fund to purchase or sell portfolio securities.
If two or more broker-dealers are considered capable of offering the equivalent
likelihood of best execution, the broker-dealer who has sold our shares and/or
shares of other Lord Abbett-sponsored funds may be preferred.
<PAGE>
If other clients of Lord Abbett buy or sell the same security at the same time
as we do, transactions will, to the extent practicable, be allocated among all
participating accounts in proportion to the amount of each order and will be
executed daily until filled so that each account shares the average price and
commission cost of each day. Other clients who direct that their brokerage
business be placed with specific brokers or who invest through wrap accounts
introduced to Lord Abbett by certain brokers may not participate with us in the
buying and selling of the same securities as described above. If these clients
wish to buy or sell the same security as we do, they may have their transactions
executed at times different from our transactions and thus may not receive the
same price or incur the same commission cost as we do.
We will not seek "reciprocal" dealer business (for the purpose of applying
commissions in whole or in part for our benefit or otherwise) from dealers as
consideration for the direction to therm of portfolio business.
If we tender portfolio securities pursuant to a cash tender offer, we will seek
to recapture any fees or commissions involved by designating Lord Abbett our
agent so that the fees may be passed back to us. As other legally permissible
opportunities come to our attention for the direct or indirect recapture by us
of brokerage commissions or similar fees paid on portfolio transactions, our
directors will determine whether we should or should not seek such recapture.
For the period from August 1, 1995 (commencement of operations) through November
30, 1995, we paid total commissions to independent broker-dealers of $_________
with respect to the Mid-Cap Series.
5.
Purchases, Redemptions
and Shareholder Services
Information concerning how we value our shares for the purchase and redemption
of our shares is contained in the Prospectus under "Purchases" and
"Redemptions", respectively.
As disclosed in the Prospectus, we calculate our net asset value as of the close
of the New York Stock Exchange ("NYSE") on each day is a day that the NYSE is
open for trading by dividing our total net assets by the number of shares
outstanding at the time of calculation. The NYSE is closed on Saturdays and
Sundays and the following holidays -- New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
The Fund values its portfolio securities at market value as of the close of the
NYSE. Market value will be determined as follows: securities listed or admitted
to trading privileges on the New York or American Stock Exchange or on the
NASDAQ National Market System are valued at the last sales price, or, if there
is no sale on that day, at the mean between the last bid and asked prices, or,
in the case of bonds, in the over-the-counter market if, in the judgment of the
Fund's officers, that market more accurately reflects the market value of the
bonds. Over-the-counter securities not traded on the NASDAQ National Market
System are valued at the mean between the last bid and asked prices. Securities
for which market quotations are not available are valued at fair market value
under procedures approved by the Board of Directors.
The maximum offering price of our shares on February ____, 1996 was computed as
follows (assuming no sales charge currently in effect):
Small-Cap Series Mid-Cap Series
Maximum offering price per share
is equal to the net asset value
per share (net assets divided by
shares outstanding).....................$10.00 $_________
The Fund has entered into a distribution agreement with Lord Abbett under which
Lord Abbett is obligated to use its best efforts to find purchasers for the
shares of the Fund and to make reasonable efforts to sell the Series' shares so
long as, in Lord Abbett's judgment, a substantial distribution can be obtained
by reasonable efforts.
<PAGE>
As stated in the Prospectus, our shares may be purchased at net asset value only
by directors (trustees) of the Lord Abbett-sponsored funds, partners and
employees of Lord Abbett, and spouses and other family members of such directors
(trustees), partners and employees.
The right to redeem and receive payment, as described in the Prospectus, may be
suspended if the NYSE is closed (except for weekends or customary holidays),
trading on the NYSE is restricted or the Securities and Exchange Commission
deems an emergency to exist.
Our Board of Directors may authorize redemption of all of the shares in any
account in which there are fewer than 25 shares. Before authorizing such
redemption, the Board must determine that it is in our economic best interest or
necessary to reduce disproportionately burdensome expenses in servicing
shareholder accounts. At least 60 days' prior written notice will be given
before any such redemption, during which time shareholders may avoid redemption
by bringing their accounts up to the minimum set by the Board.
6.
Past Performance
The Fund computes the average annual compounded rate of total return during
specified periods that would equate the initial amount invested to the ending
redeemable value of such investment by adding one to the computed average annual
total return, raising the sum to a power equal to the number of years covered by
the computation and multiplying the result by one thousand dollars, which
represents a hypothetical initial investment. The calculation assumes deduction
of the maximum sales charge from the initial amount invested (in this case there
is no sales charge) and reinvestment of all income dividends and capital gains
distributions on the reinvestment dates at prices calculated as stated in the
Prospectus. The ending redeemable value is determined by assuming a complete
redemption at the end of the period(s) covered by the average annual total
return computation.
These figures represent past performance, and an investor should be aware that
the investment return and principal value of a Fund investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Therefore, there is no assurance that this performance will be
repeated in the future.
7.
Taxes
The value of any shares redeemed by the Fund or otherwise sold may be more or
less than your tax basis in the shares at the time the redemption or sale is
made. Any gain or loss generally will be taxable for federal income tax
purposes. Any loss realized on the sale or redemption of Fund shares which you
have held for six months or less will be treated for tax purposes as a long-term
capital loss to the extent of any capital gains distributions which you received
with respect to such shares. Losses on the sale of stock or securities are not
deductible if, within a period beginning 30 days before the date of the sale and
ending 30 days after the date of sale, the taxpayer acquires stock or securities
that are substantially identical.
The writing of call options and other investment techniques and practices which
the Fund may utilize, as described above under "Investment Objectives and
Policies," may create "straddles" for United States federal income tax purposes
and may affect the character and timing of the recognition of gains and losses
by the Fund. Such transactions may increase the amount of short-term capital
gain realized by the Fund, which is taxed as ordinary income when distributed to
shareholders. Limitations imposed by the Internal Revenue Code on regulated
investment companies may restrict the Fund's ability to engage in transactions
in options. See "Small-Cap Series" below for more information.
As described in the Prospectus under "How We Invest - Risk Factors," the Fund
may be subject to foreign withholding taxes which would reduce the yield on its
investments. Tax treaties between certain countries and the United States may
reduce or eliminate such taxes. It is expected that Fund shareholders who are
subject to United States federal income tax will not be entitled to claim a
federal income tax credit or deduction for foreign income taxes paid by the
Fund.
<PAGE>
The Fund will be subject to a 4% non-deductible excise tax on certain amounts
not distributed (and not treated as having been distributed) on a timely basis
in accordance with a calendar-year distribution requirement. The Fund intends to
distribute to shareholders each year an amount adequate to avoid the imposition
of such excise tax. Dividends paid by the Fund will qualify for the
dividends-received deduction for corporations to the extent they are derived
from dividends paid by domestic corporations.
Gains and losses realized by the Fund on certain transactions, including sales
of foreign debt securities and certain transactions involving foreign currency,
will be treated as ordinary income or loss for federal income tax purposes to
the extent, if any, that such gains or losses are attributable to changes in
exchange rates for foreign currencies. Accordingly, distributions taxable as
ordinary income will include the net amount, if any, of such foreign exchange
gains and will be reduced by the net amount, if any, of such foreign exchange
losses.
If the Fund purchases shares in certain foreign investment entities, called
"passive foreign investment companies," it may be subject to United States
federal income tax on a portion of any "excess distribution" or gain from the
disposition of such shares, even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on either the Fund or its shareholders in respect of
deferred taxes arising from such distributions or gains.
If the Fund were to invest in a passive foreign investment company with respect
to which the Fund elected to make a "qualified electing fund" election, in lieu
of the foregoing requirements, the Fund might be required to include in income
each year a portion of the ordinary earnings and net capital gains of the
qualified electing fund, even if such amount were not distributed to the Fund.
<PAGE>
SMALL-CAP SERIES. Gains or losses on sales of securities by the Small-Cap Series
will be long-term capital gains or losses if the securities have been held by it
for more than one year, except in certain cases where the Small-Cap Series
acquires a put or writes a call thereon or otherwise holds an offsetting
position with respect to the securities. Other gains or losses on the sale of
securities will be short-term capital gains or losses. If an option written by
the Small-Cap Series lapses or is terminated through a closing transaction, such
as a repurchase by the Small-Cap Series of the option from its holder, the
Small-Cap Series will realize a short-term capital gain or loss, depending on
whether the premium income is greater or less than the amount paid by the
Small-Cap Series in the closing transaction. If securities are sold by the
Small-Cap Series pursuant to the exercise of a call option written by it, the
Small-Cap Series will add the premium received to the sale price of the
securities delivered in determining the amount of gain or loss on the sale. If
securities are purchased by the Small-Cap Series pursuant to the exercise of a
put option written by it, the Small-Cap Series will subtract the premium
received from its cost basis in the securities purchased. The requirement that
the Small-Cap Series derive less than 30% of its gross income from gains from
the sale of securities held for less than three months may limit the Small-Cap
Series' ability to write options.
Certain futures contracts and certain listed options held by the Small-Cap
Series will be required to be "marked to market" for federal income tax purpose,
i.e., treated as having been sold at their fair market value on the last day of
the Small-Cap Series' taxable year (referred to as Section 1256 Contracts). 60%
of any gain or loss recognized on actual or deemed sales of such Section 1256
Contracts will be treated as long-term capital gain or loss, and 40% of such
gain or loss will be treated as short-term capital gain or loss. The Small-Cap
Series may be required to defer the recognition of losses on securities and
options and futures contracts to the extent of any recognized gain on offsetting
positions held by the Small-Cap Series.
8.
Information About the Fund
The directors, trustees and officers of Lord Abbett-sponsored mutual funds,
together with the partners and employees of Lord Abbett, are permitted to
purchase and sell securities for their personal investment accounts. In engaging
in personal securities transactions, however, such persons are subject to
requirements and restrictions contained in the Fund's Code of Ethics which
complies, in substance, with each of the recommendations of the Investment
Company Institute's Advisory Group on Personal Investing. Among other things,
the Code requires that Lord Abbett partners and employees obtain advance
<PAGE>
approval before buying or selling securities, submit confirmations and quarterly
transaction reports, and obtain approval before becoming a director of any
company; and it prohibits such persons from investing in a security 7 days
before or after any Lord Abbett-sponsored fund or Lord Abbett-managed account
considers a trade or trades in such G1 security, prohibiting profiting on trades
of the same security within 60 days and trading on material and non-public
information. The Code imposes certain similar requirements and restrictions on
the independent directors and trustees of each Lord Abbett-sponsored mutual fund
to the extent contemplated by the recommendations of such Advisory Group.
9.
Financial Statements
The financial statements with respect to the Mid-Cap Series for the period from
August 1, 1995 (commencement of operations) through November 30, 1995 and the
report of Deloitte & Touche LLP, independent auditors, on such financial
statements contained in the 1995 Annual Report to Shareholders of Lord Abbett
Research Fund, Inc. are incorporated herein by reference to such financial
statements and report in reliance upon the authority of Deloitte & Touche LLP as
experts in auditing and accounting.
<PAGE>
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Part A - Financial Highlights for the Mid-Cap Series
for the period August 1, 1995 (commencement of
operations) to November 30, 1995.*****
Part B - Statement of Net Assets for the Mid-Cap Series
at November 30, 1995.***** Statement of Operations for
the Mid-Cap Series for the period August 1, 1995
(commencement of operations) to November 30, 1995.*****
Statement of Changes in Net Assets for the Mid-Cap
Series for the period August 1, 1995 (commencement of
operations) to November 30, 1995. *****
(b) Exhibits -
99.B1 Articles of Incorporation*
99.B2 By-Laws*
99.B5 Management Agreement between Registrant and Lord,
Abbett & Co.*
99.B6 Form of Distribution Agreement between Registrant
and Lord, Abbett & Co.*
99.B7 Retirement Plan for Non-interested Person
Directors and Trustees of Lord Abbett Funds.***
99.B8 Global Custody Agreement*
99.B9 Agreement between Registrant and Transfer Agent*
99.B10 Opinion and Consent of Counsel*
99.B11 Consent of Deloitte & Touche LLP*****
99.B13 Subscription Agreement*
99.B14 Lord Abbett Prototype Retirements Plans****
(1) 401(k)
(2) IRA
(3) 403(b)
(4) Profit-Sharing, and
(5) Money Purchases
99.B15 Form of Rule 12b-1 Plan (Large-Cap Series only) *
99.B17 Financial Data Schedule Under Rule 483*****
* Previously filed
** Filed herewith.
*** Incorporated by reference to Post-Effective Amendment No. 7 to the
Registration Statement (on Form N1-A) of Lord Abbett Equity Fund
(File No. 811-6033).
**** Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement (on Form N1-A) of Lord Abbett Securities
Trust (File No. 811-7538).
***** To be filed.
Exhibit items from Form N-1A not mentioned are not applicable.
Item 25. Person Controlled by or Under Common Control with Registrant
None.
<PAGE>
Item 26. Number of Record Holders of Securities
As of November 30, 1995 the number of record holders
of shares of Mid-Cap Series 51 and Small-Cap Series - zero.
Item 27. Indemnification
Registrant is incorporated under the laws of the State of
Maryland and is subject to Section 2-418 of the Corporations
and Associations Article of the Annotated Code of the State
of Maryland controlling the indemnification of directors and
officers. Since Registrant has its executive offices in the
State of New York, and is qualified as a foreign corporation
doing business in such State, the persons covered by the
foregoing statute may also be entitled to and subject to the
limitations of the indemnification provisions of Section
721-727 of the New York Business Corporation Law.
The general effect of these statutes is to protect officers,
directors and employees of Registrant against legal liability
and expenses incurred by reason of their positions with the
Registrant. The statutes provide for indemnification for
liability for proceedings not brought on behalf of the
corporation and for those brought on behalf of the
corporation, and in each case place conditions under which
indemnification will be permitted, including requirements
that the officer, director or employee acted in good faith.
Under certain conditions, payment of expenses in advance of
final disposition may be permitted. The By-Laws of
Registrant, without limiting the authority of Registrant to
indemnify any of its officers, employees or agents to the
extent consistent with applicable law, makes the
indemnification of its directors mandatory subject only to
the conditions and limitations imposed by the above-mentioned
Section 2-418 of Maryland Law and by the provisions of
Section 17(h) of the Investment Company Act of 1940 as
interpreted and required to be implemented by SEC Release No.
IC-11330 of September 4, 1980.
In referring in its By-Laws to, and making indemnification of
directors subject to the conditions and limitations of, both
Section 2-418 of the Maryland Law and Section 17(h) of the
Investment Company Act of 1940, Registrant intends that
conditions and limitations on the extent of the
indemnification of directors imposed by the provisions of
either Section 2-418 or Section 17(h) shall apply and that
any inconsistency between the two will be resolved by
applying the provisions of said Section 17(h) if the
condition or limitation imposed by Section 17(h) is the more
stringent. In referring in its By-Laws to SEC Release No.
IC-11330 as the source for interpretation and implementation
of said Section 17(h), Registrant understands that it would
be required under its By-Laws to use reasonable and fair
means in determining whether indemnification of a director
should be made and undertakes to use either (1) a final
decision on the merits by a court or other body before whom
the proceeding was brought that the person to be indemnified
("indemnitee") was not liable to Registrant or to its
security holders by reason of willful malfeasance, bad faith,
gross negligence, or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct")
or (2) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the
indemnitee was not liable by reason of such disabling
conduct, by (a) the vote of a majority of a quorum of
directors who are neither "interested persons" (as defined in
the 1940 Act) of Registrant nor parties to the proceeding, or
(b) an independent legal counsel in a written opinion. Also,
Registrant will make advances of attorneys' fees or other
expenses incurred by a director in his defense only if (in
addition to his undertaking to repay the advance if he is not
ultimately entitled to indemnification) (1) the indemnitee
provides a security for his undertaking, (2) Registrant shall
be insured against losses arising by reason of any lawful
advances, or (3) a majority of a quorum of the non-
interested, non-party directors of Registrant, or an
independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts, that
there is reason to believe that the indemnitee ultimately
will be found entitled to indemnification.
<PAGE>
Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expense incurred or paid by a
director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
Item 28. Business and Other Connections of Investment Adviser
Lord, Abbett & Co. acts as investment advisor for seventeen,
other open-end investment companies (of which it is principal
underwriter for fifteen), and as investment adviser to
approximately 5,100 private accounts. Other than acting as
directors and/or officers of open-end investment companies
managed by Lord, Abbett & Co., none of Lord, Abbett & Co.'s
partners has, in the past two fiscal years, engaged in any
other business, profession, vocation or employment of a
substantial nature for his own account or in the capacity of
director, officer, employee, partner or trustee of any entity
except as follows:
John J. Walsh
Trustee
The Brooklyn Hospital Center
100 Parkside Avenue
Brooklyn, N.Y.
Item 29. Principal Underwriter
(a) Affiliated Fund, Inc.
Lord Abbett U. S. Government Securities Fund, Inc.
Lord Abbett Bond-Debenture Fund, Inc.
Lord Abbett Value Appreciation Fund, Inc.
Lord Abbett Developing Growth Fund, Inc.
Lord Abbett Tax-Free Income Fund, Inc.
Lord Abbett California Tax-Free Income Fund, Inc.
Lord Abbett Fundamental Value Fund, Inc.
Lord Abbett Global Fund, Inc.
Lord Abbett U. S. Government Securities Money Market
Fund, Inc.
Lord Abbett Series Fund, Inc.
Lord Abbett Equity Fund
Lord Abbett Tax-Free Income Trust
Lord Abbett Securities Trust
Lord Abbett Investment Trust
INVESTMENT ADVISOR
American Skandia Trust (Lord Abbett Growth and
Income Portfolio)
(b) The partners of Lord, Abbett & Co. are:
Name and Principal Positions and Offices
Business Address (1) with Registrant
-------------------- ---------------
Ronald P. Lynch Chairman
Robert S. Dow President
Kenneth B. Cutler Vice President & Secretary
Thomas S. Henderson Vice President
Stephen I. Allen Vice President
Daniel E. Carper Vice President
Robert G. Morris Vice President
E. Wayne Nordberg Vice President
John J. Walsh Vice President
(1) Each of the above has a principal business address
767 Fifth Avenue, New York, NY 10153
(c) Not applicable
Item 30. Location of Accounts and Records
Registrant maintains the records, required by Rules 31a - 1(a) and
(b), and 31a - 2(a) at its main office.
Lord, Abbett & Co. maintains the records required by Rules
31a - 1(f) and 31a - 2(e) at its main office.
Certain records such as canceled stock certificates and
correspondence may be physically maintained at the main office of
the Registrant's Transfer Agent, Custodian, or Shareholder
Servicing Agent within the requirements of Rule 31a-3.
Item 31. Management Services
None
Item 32. Undertakings
The Registrant undertakes to file a post-effective amendment to
the registration statement, using financial statements with
respect to the Small-Cap Series which need not be certified,
within four to six months after the effective date of the
registration statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant duly caused this Registration Statement
and/or any amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on the
7th day of December, 1995
LORD ABBETT RESEARCH FUND, INC.
By /s/ Ronald P. Lynch
Ronald P. Lynch,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Chairman of the Board
/s/ Ronald P. Lynch and Director
Ronald P. Lynch (Title) 12/7/95
/s/ Hansel B. Millican Director
Hansel B. Millican (Title) 12/7/95
Vice President and
/s/ John J. Gargana, Jr. Chief Financial Officer
John J. Gargana, Jr. (Title) 12/7/95
/s/ Thomas J. Neff Director
Thomas J. Neff (Title) 12/7/95
